The government is set to slash £700 from the fixed recoverable costs for low-level claims handled through the RTA Portal scheme, the Gazette can reveal. According to figures released today by the Ministry of Justice, solicitors running claims valued at up to £10,000 will be able to claim £500 in costs from next April, down from £1,200 today.
Stage one claims will be worth £200 and stage two are £300.
For employer and public liability claims, to be admitted to the electronic portal from next April, maximum solicitors’ costs will be £900.
For RTA claims valued up to £25,000, fixed recoverable costs will be capped at £800, whilst higher-level EL and PL will be worth £1,600 in costs. The portal scheme is mandatory for all claims within scope where liability is admitted.
The government today opened a consultation on the new figures and will hope to have the new fees in place by next April, when the portal is extended to £25,000 and to EL and PL claims.
In a letter to ‘stakeholders’, Helen Grant, the justice minister, explains that the new costs take account of inflation since the portal was introduced in 2009.
However, costs have been reduced to ‘reflect the forthcoming ban on referral fees’. Insurers argued each referral was worth around £800 and lobbied to have that amount taken off the fixed costs.
But the size of the cut will come as a surprise to members of the legal profession who took part in long negotiations with insurers when the costs were first set.
They were drawn up to take into account guideline hourly rates, which were set up in 2000 – four years before referral fees were allowed.